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Mystery surrounds Zain bidders - apart from Vivendi

Just as the picture was becoming clearer--with French-based Vivendi finally admitting it was attempting to raise the necessary finance to bid for Zain's African operations--two other bidders have appeared.

According to the Kuwaiti-based Zain, it has signed a preliminary agreement allowing three international companies to bid for its African business. Without confirming the identities, insiders close to Zain have confirmed that one of the bidders is based in France (no surprise), but what has proved more than interesting is the location of remaining pair--India and the UK.

While various Indian operators have expressed interest in expanding into Africa--as seen with Bharti's involvement with South African-based MTN--the surprise is which company in the UK would be interested? T-Mobile and FT Orange can be discounted (FT has consistently indicated its disinterest), leaving O2 Telefonica and Vodafone.

Both of these two firms have good reason to be interested in Zain's African assets, but are equally hidebound by financial, cultural and conflicting interests to put a deal together.

However, it would appear that Vivendi, which is making the running today, will need to be financially creative to make the acquisition look sensible and is said to be hurriedly contacting the banking community about raising €4.5 billion in loans on a deal valued at around €10 billion.

Equally curious is Zain's apparent willingness to consider selling a majority stake in its African empire. According to Saad al Barrak, Zain's CEO, if the company is approached by big players with clear value creation, then ‘we have to pass this to our shareholders'. He confirmed that Zain had received tentative interest in its African assets from several international companies, but declined to identify them. He added that only Vivendi had made an informal offer for the assets.